The Indiana Statehouse on Thursday, Sept. 18. Photo by Whitney Downard, Indiana Capital Chronicle.

By Leslie Bonilla Muñiz
Indiana Capital Chronicle

INDIANAPOLIS — More Indiana state agencies are earning approval for their mandatory expense-reduction strategies — albeit with varying enthusiasm.

Some warned that the effective 10% cuts could jeopardize required work, while others adopted a positive tone.

“We realize it is not about equal giving but equal sacrifice … because we are ‘#INThisTogether,’” Department of Revenue leaders wrote.

A grim May revenue forecast prompted lawmakers to trim most appropriations by 5% and authorized the State Budget Agency to withhold another 5%.

Indiana Fiscal Policy Institute President Stephanie Wells speaks at the organization’s annual luncheon, held at Newfields in Indianapolis on Tuesday, Sept. 16. Photo by Leslie Bonilla Muñiz, Indiana Capital Chronicle.

Agencies had to submit “strategic spending reduction plans” by June. Approvals are rolling out, and their filings are being uploaded.

Stephanie Wells, president of the Indiana Fiscal Policy Institute, celebrated the transparency.

“More data and more information on the decisions of Hoosier government is our preference,” she said, noting some reports are sparse.

She urged continued updates on how cuts affect services.

Personnel Preoccupations

Labor-intensive agencies noted that most of their budgets go to employees.

The Office of Inspector General, reporting salaries and benefits account for 92% of costs, warned that cuts would hinder its fraud-fighting mission.

It won an exemption from the 5% reserve.

Indiana Gov. Mike Braun speaks at a Department of Workforce Development event on Tuesday, Sept. 16. Photo from the Office of the Governor.

Others are taking the hit.

The State Personnel Department and the Office of Administrative Law Proceedings both planned on “position management strategies” — delaying hires by at least 30 days, collapsing duties into existing roles, and deactivating non-critical vacancies.

The Department of Workforce Development is also downsizing: A 27% budget cut plus the 5% reserve, alongside reduced federal funding. Its staffing peaked at 1,300 in 2022 but is projected to fall below 900 in 2025.

“That’s indicative of how much… of government works: you have to hire individuals to do the work,” Wells said, noting the approach echoes Great Recession tactics.

The Public Access Counselor’s Office relied on payroll underspending after staff departures but sought a waiver to pay for a senior attorney. Without it, salaries would be capped at entry-level, leaving no deputy to fulfill statutory duties.

Meanwhile, the Commission for Higher Education emphasized its low overhead: just 2% administrative costs compared with an industry standard of 4-5%.

Contractor Considerations

Agencies also scrutinized contracts. Some shifted work in-house.

The Department of Revenue will assume paper check scanning from a vendor this fall, saving up to $300,000 annually. It also hopes to halve its $3.5 million mailing budget through legislation allowing fewer resend attempts and expanded e-notices. But DOR warned of risks, including costs tied to a legislator-mandated tax amnesty program and potentially absorbing Child Support Bureau functions.

The Indiana Management and Performance Hub focuses on data-based efficiency. Photo from website.

The data-focused Management Performance Hub faces a funding shortfall for Informatica services past March. Leaders requested to retain $350,000 from prior reversions while rushing to migrate databases. Missing deadlines could cost hundreds of thousands in renewals, and outside contractor help may be required.

The State Board of Accounts, Indiana’s auditor, also faces pressure. Its workload rose 30% with federal pandemic dollars, a spike lasting until 2027. Without contractors, it would need 30 more examiners — difficult amid declining accounting majors, fewer CPA candidates, and stiff private-sector competition. While no layoffs are planned, SBOA warned reduced funding means fewer audits.

Exemption Efforts

Exemption requests were common. “Of course, you’re going to ask where you can,” Wells said.

The Indiana Department of Health successfully sought relief to continue licensing and surveying hundreds of healthcare facilities and thousands of labs, nursing homes, and clinics. Without it, leaders warned, CMS could cut funding further.

Indiana State Police Superintendent Anthony Scott tours an ISP garage alongside Gov. Mike Braun on Friday, Aug. 29, in Indianapolis. Photo by Casey Smith, Indiana Capital Chronicle.

But IDOH’s request for exemption from the Statewide Cost Allocation Plan was denied. The agency expects to owe the state $1.5 million in 2026 due to arrears and rising personnel expenses.

The Indiana State Police also submitted multiple waiver requests. While lawmakers boosted its budget overall, some accounts were cut, though labs and inspection programs were spared. Leaders detailed savings strategies down to fueling practices, idling avoidance, and in-house radio repairs.